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AmSouth blamed for transition problems
RBC presence in Decatur not in peril

By Eric Fleischauer · 340-2435

Problems encountered by AmSouth customers whose accounts were bought by RBC Centura were AmSouth’s fault, said RBC’s chief executive officer.

RBC bought the Danville Road Southwest branch, but many customers had problems contacting customer service and accessing new debit cards when RBC began local operations March 9.

Scott Custer, RBC’s, CEO said that AmSouth had failed to send a letter alerting its affected customers of the change in ownership. That failure generated customer confusion that overtaxed RBC call centers.

The main problem, Custer said, was that customers tried to use their AmSouth debit cards instead of using newly issued RBC cards.

Mailings sent out

Custer said RBC sent mailings to customers, but he suspected many customers threw those communications away because there had not been an advance explanation from AmSouth.

“When you’re converting 150,000 customers, we couldn’t contact every one of them on the telephone one by one,” Custer said. “Because of the confusion, we underestimated the call volume we were going to get in our call centers. We’ve had some issues where people have had to wait to get through to the call center. That’s caused some customer irritation. We believe it’s short-lived.”

Losing customers before the transition did not hurt RBC because it merely reduced the purchase price.

Customers who pulled their accounts after the transition represent a loss to RBC.

The Huntsville-Decatur branches purchased by RBC included about 30,000 customers and $400 million in deposits.

As of June 30, 2006, the Danville Road branch had $54.3 million in deposits, according to FDIC records.

That amount represented 29 percent of all deposits in AmSouth’s Decatur locations.

As a condition of the merger between AmSouth and Regions Bank, the combined entity had to divest several branches in Madison County and the one branch in Decatur.

Custer said the divestiture was a good opportunity for RBC.

“We knew there were great dynamics going on in Huntsville and Decatur,” he said, including job growth anticipated from the expansion of Redstone Arsenal.

He said the other attractive feature of the Huntsville-Decatur market is its growth in per capita income.

“You look at the trajectory of where it’s going over the next three years,” Custer said. “That trajectory is as good and as steep as any market we’re in. It compares favorably to Atlanta and Charlotte and Orlando, Fla. It’s a very well-kept secret.”

Custer downplayed RBC’s ties to Canada, explaining that it is a North Carolina-based bank. Royal Bank of Canada is Centura’s sole shareholder.

Another foreign-owned bank, Banco Bilbao Vizcaya Argentaria S.A, recently purchased Compass Bank. Compass has deposits in Decatur of $195 million.

“The only time the connection to Canada seems to get brought up is in Alabama,” Custer said. “You all clearly seem to have a more keen sense of that than anyone else does. It hasn’t been an issue anywhere else.”

RBC operates 331 branches in Virginia, North Carolina, South Carolina, Georgia, Florida and now Alabama.

Custer said RBC offered jobs to every employee in the branches it purchased from AmSouth.

“We’ve had almost 100 percent retention of employees,” Custer said. “We’ve not lost a single person that I’m aware of through this process.”

Custer said RBC plans to open a second Decatur branch, on the east side of town, within 12 months.

RBC does not plan to buy AmSouth’s downtown building, formerly its main office, Custer said. He said he did not expect having only one Decatur branch in the interim would cause a loss of customers.

“I don’t think having one branch necessarily puts you in peril, if you do a good job at that office and you have good people,” Custer said. “In markets like Decatur, I don’t know that you have to have a branch on every corner to be successful.”

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